Rethinking Employee Retention

Am tempted to start my blog with a provocative question: while many of us beat our drums around the “war for external talent”, are we missing out on addressing the "elephant in the room" with regards to employee retention at the workplace?

It is no surprise that attrition discussions top the people agenda given the statistics associated with the leaking funnel. The fact that the loss ranges from an employee’s one month salary to even six month’s salary makes the entire equation scarier. 

Most performing team members rarely resign on an impulsive whim or because the canteen menu doesn't serve their favorite sandwich or the fact that the vending machine doesn't serve their favourite brew. They also do not quit because they lack gratitude or loyalty. Most of the times, their switch goes off when they are not able to find purpose or see their contributions in the larger scheme of things. As the consolidated costs of replacement get astronomical and complex, at the foundation of every “retention design”lies a segmented strategy basis employee life cycle and motivation anchors. While we would all agree that there is a full suite of solutions and a wide buffet available, sometimes, the practical tips to avoid employees from jumping ship are surprisingly simple!

Here are four simple design principles that have worked for me:

Principle # 1: To improve retention, we need to pay people more......pay more attention!

Punchy statement indeed! And a very impactful one! The focus on harnessing efforts for top talent comes naturally to everybody. Apart from this cohort, I also focus on the “hidden gems" and “solid citizens”. Counter-intuitive as it may sound to linear thinkers, quitting the job is not always a direct function of money in hand. A “one-size-fits-all” retention strategy which is tilted towards compensation corrections, in my view, is generally unsuccessful in persuading employees to stay for the long term. Though coughing up the cash may assume priority for certain segments who are at the lower compensation thresholds and at a wealth- accumulation life stage, the glue that makes all employees stick is “purpose and respect”. As managers and leaders, we are the architects of the work environment and experiences for our teams. If you truly trust, care and connect with our teams to build a larger purpose and meaning to their work, they will willingly march with you at double energy and speed. 

Principle # 2: Retention is the new......Acquisition!

The rules of the game and of the talent battlefield have made a drastic shift. Companies are moving away from their traditional focus of engagement and development to realigning what is "actually" meant by these two words. Being a talent magnet is no longer about attracting external talent but also about retaining your best ones. We need to think of retention as "re-recruiting our employees real time" and in a continuous state while they are in our organisation. This paradigm shift is needed to erase the blurred line between the two-way street of the “push”and “pull”factors. Regrettably, a few managers unwittingly create circumstances for employees to walk out-of-the-door because they view everyone as easily replaceable cogs in a wheel. While I echo their sentiments that no one is indispensable, the hidden costs of replacements at times create a momentary derailment in the race to the summit. 

Principle # 3: Make your employees more.....employable!

There have been two schools of thought on this. The orthodox thinkers calculate the monetary loss if the employee leaves after his/ her training. The progressive managers evaluate the loss, that moves up in geometric progression, if one doesn't invest the time and money in developing their teams. Imagine the damage and paralysis that can be caused by a set of untrained/ stagnated team members if they continue in the company. I have been fortunate to work with some leaders who effortlessly orchestrate opportunities and bring out the meaningful balance of developing not only their team member's professional skills but also provide unwavering support in their personal growth and thus attach a meaningful tone to the entire gamut of building careers. 

Principle # 4: Churn has it’s positive stroke......don’t carry the cost of non-performance!

While it is necessary to beat all odds and keep our good ones, it is equally pertinent to move up the value chain around the “talent refresh”agenda. It is never a good idea to pursue unrealistic low turnover rates which gets counterproductive to business growth and innovation. While employee churn is a tough pill to swallow, allowing to carry the cost of non-performance is the killer of growth and it's momentum. Designed churn is the necessary antidote.

As an ending note, would like to put forth a powerful message that I stumbled upon a few years ago: "It is strange that SWORD and WORDS have the same letters. Even more, strange is that they have the same effect if not handled properly." This has continued to stay etched in my mind and I firmly believe that it is upto us whether we want our words and behaviour to serve as a springboard and enhance our team's performance and engagement or we want our interactions to become the unfortunate springs to push the employee out in search of greener pastures.